Uttar Pradesh investment turnaround rides on sugar

The reputation of the present government of Uttar Pradesh notwithstanding, the state has been attracting investment on an unprecedented scale, surprising its own officials.

This has been brought about by the levels of investment that has been proposed for the sugar industry. Sugar has catapulted Uttar Pradesh to the top in the numbers of industrial entrepreneur memoranda (IEMs) and the letters of intent (LoIs) filed in the current year.

From January to April, 245 IEMs were filed for investment in Uttar Pradesh worth Rs 18,981 crore. This is expected to provide employment to 70,752 persons.

The sugar industry in the state has attracted investment worth Rs 5,000 crore in the last and present (2006-07) fiscals and the buoyancy in investment may well affect fiscal 2008.

This fiscal, 18 sugar units will be added to the nine that exist in the state. Rahul Bhatnagar, secretary of the industry, cautions that many units have been filing IEMs only to prevent others from entering their area. Despite this, the number of units implemented has been phenomenal, giving a boost to the rural areas.

According to statistics provided by Udyog Bandhu, figures for April 2006 established a record. 112 IEMs were filed for investment worth Rs 10,733 crore "" a level which is not generally achieved even in a year's time.

Historically, says Narendra Bhushan, ED at Udyog Bandhu, Uttar Pradesh has been ranked fifth in all-India figures, but for the first time in 2005, it reached third place.

In 2005, the state attracted investment proposals worth Rs 33,341 crore, against Rs 14,249 crore that came in, in 2004, and Rs 1,511 crore in 2003, followed, in descending order, by Rs 1,779 crore, Rs 2,689 crore and Rs 2,318 crore in 2002, 2001 and 2000, respectively.

Between 1996 and 1999, the state attracted proposals for investment worth Rs 9,827 crore, Rs 6,219 crore and Rs 5,477 crore.

Thus the recent high trend in investment appears to be a break with the past.

Similarly, the number of proposals between 1996 and 2005, has shown a similar trend, except that lately the investment per unit that has been proposed, is higher than before. The figures look like this "" 610 in 1996, 438 in 1997 and 287, 239 and 251 in 1998, 1999 and 2000, respectively.

In 2001, the number started at 236 and rose to 693 by 2005. In the intermediate years, the state drew 244, 261 and 428 proposals.

Investment per unit, however, has shown a steep rise. In 1996 it worked out to Rs 16.1 crore and slid in 2001 to Rs 10.9 crore, to go up to a high of Rs 48 crore a unit in 2005. The trend towards higher investment per unit is unmistakable.

Since 1991, when the present rules were formulated, the state has received 1,450 IEMs with proposed investment worth Rs 65,268 crore.